Big Upside for Small Defense Contractor

Dynamics Research offers consulting services on growing areas of the government budget likely safe from any sweeping spending cuts.

While the impending fiscal cliff hangs over the entire stock market, perhaps no sector has been as affected as defense contractors. Concerns over sequestration, which would bring 10% cuts to the defense budget, linger, even as most participants doubt that spending cuts of that magnitude will occur.

Amid this backdrop, investors have sold off defense companies, particularly service providers. Take Dynamics Research, a provider of services, such as management and IT consulting to the Department of Defense, with a market...